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Pixel8r

Why speculative trading is the downfall of the modern world

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I have been thinking for the last couple of years that the cause of this financial crisis is the greed of traders and their continual want for increased profits at whatever cost.

 

There does seem to be two types of people on this site, those that trade and those that want to protect their wealth through this crisis. I sometimes think that lower down traders recognise the crooked actions of traders higher up the food chain, but rather than think what they can do about it chose rather to attempt to join them.

 

There is a continual battle on this site between the traders and the wealth preservers, which always comes down to traders claiming they are better because they have made more money rather than any deeper conversations. I think that the main reason we have run into the situation that we are in currently is due to the continual need to make better trades. As far as I can see for each trade there is a winner and a loser, so far the winners have been the bankers by their near collapsing of the financial system which bought about them being bailed out at the expense of the common man via government bailouts which will end up being the common man via taxes.

 

I say the action on this site is a microcosm of what is going on in the wider world. This gold and silver bull run is the way that the common man can bring the trading obsessed bankers to their knees. So us buyers and holders of precious metals should embrace the insults and desperation as it shows that we are finally getting somewhere in our battle to enforce a different way of life than the one they are trying to put on us.

 

The world needs to go back to investment meaning providing the funding for research, construction and production for a better life for all of us, rather than a way for those in the know to steal profits from the common hardworking public. The greed of traders is bringing this world down around us, if we don't do something about it we are all going to end up living in a world which is worse for all of us.

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Shall I put some links here, for some of the very many good threads on GEI (started by myself and others)

about things other than making money?

 

If some of the ideas discussed in the Fringe Section prove accurate, then profits made from trading may not matter much.

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I have been thinking for the last couple of years that the cause of this financial crisis is the greed of traders and their continual want for increased profits at whatever cost.

The irony is that the traders are reacting badly to the monetary crisis we understand. Its what people do when the value of money begins its decline.

 

from the french hyperinflation:

 

Out of the inflation of prices grew

a speculating class; and, in the complete uncertainty as to

the future, all business became a game of chance, and all

business men, gamblers. In city centers came a quick growth

of stock-jobbers and speculators; and these set a debasing

fashion in business which spread to the remotest parts of

the country. Instead of satisfaction with legitimate profits,

came a passion for inordinate gains. Then, too, as values

became more and more uncertain, there was no longer any

motive for care or economy, but every motive for immediate

expenditure and present enjoyment.

 

For more enjoyment for those who think we are entering complete financial, moral and political

prostration. Which ties very nicely in with this superb thread.

 

And, finally, as to the general development of the theory

and practice which all this history records: my subject has

been Fiat Money in France; How it came; What it brought;

and How it ended.

It came by seeking a remedy for a comparatively small

evil in an evil infinitely more dangerous. To cure a disease

temporary in its character, a corrosive poison was administered,

which ate out the vitals of French prosperity.

It progressed according to a law in social physics which

we may call the "law of accelerating issue and depreciation."

It was comparatively easy to refrain from the first

issue; it was exceedingly difficult to refrain from the second;

to refrain from the third and those following was practically

impossible.

It brought, as we have seen, commerce and manufactures,

the mercantile interest, the agricultural interest, to ruin.

It brought on these the same destruction which would come

to a Hollander opening the dykes of the sea to irrigate his

garden in a dry summer.

It ended in the complete financial, moral and political

prostration of France—a prostration from which only a

Napoleon could raise it.

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It has been something on my mind for years and the "mafia" jibe in your title helped to bring it clear in my mind. If you look back through my posts from years ago, I have always mentioned that I felt that investment needed to go back to its original purpose, which is to provide funds for expansion and production, rather than the continual need to improve one up man ship of trading.Trading brings about winners and losers, investment of capital should be a winning proposition for both the borrower and the lender so both win in effect.

 

I am not insulting you personally I am just making an observation of what I believe is a major problem in the world today.

Do you think I would disagree?

 

I think that capital gains taxes could be tinkered with, to encourage longer term profits.

Hedge Fund managers make FAR TOO MUCH MONEY for the zero sum game they are playing

 

But at least it is not a NEGATIVE SUM GAME, as military spending is.

 

Tax policy should encourage positive sum investing and spending on things like R&D.

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Shall I put some links here, for some of the very many good threads on GEI (started by myself and others)

about things other than making money?

 

If some of the ideas discussed in the Fringe Section prove accurate, then profits made from trading may not matter much.

 

I would prefer if this thread was kept on topic which is the current battle between the traders and the working man. Please don't take this thread as a personal insult it is not meant so, I hope you are open minded enough to consider all opinions and not those that just go along with your current way of thinking.

 

We don't need to let things go as far as some of the outcomes in the fringe section do we?

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Do you think I would disagree?

 

I think that capital gains taxes could be tinkered with, to encourage longer term profits.

Hedge Fund managers make FAR TOO MUCH MONEY for the zero sum game they are playing

 

But at least it is not a NEGATIVE SUM GAME, as military spending is.

 

Tax policy should encourage positive sum investing and spending on things like R&D.

No I don't I believe that you actually do want to try and make the world better for all, but are a bit confused from your previous connections in your banking career.

 

I remember posting in the past that I thought the capital gains tax laws needed to be changed back to encourage long-term investments, I actually think short term trades should be taxed a lot more heavily as they do nothing for the world other than providing liquidity to markets that would be just fine without it. But also remember it was shutdown at the time. I think in the end this crisis will bring about these changes and the traders of this world should get ahead of the game rather than have it forced on them.

 

 

High frequency trading, why should this be allowed what possible benefit is it to humanity as a whole?

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I would prefer if this thread was kept on topic which is the current battle between the traders and the working man. Please don't take this thread as a personal insult it is not meant so, I hope you are open minded enough to consider all opinions and not those that just go along with your current way of thinking.

It is part of the bigger battle, with TPB making it easier for Big Banks, Big Military, and Big Pharma can make money,

whilst destroying the Middle class

 

The "war on Terrorism" with all its false flag incidents, is nothing more than a War on the Middle class.

 

The US spends far to much on military adventures, and the average man risks a loss of life and faces the certainty of higher taxes.

 

Ron Paul is one of the few in politics who has this right.

 

My old professor...

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It is part of the bigger battle, with TPB making it easier for Big Banks, Big Military, and Big Pharma can make money,

whilst destroying the Middle class

 

The "war on Terrorism" with all its false flag incidents, is nothing more than a War on the Middle class.

 

The US spends far to much on military adventures, and the average man risks a loss of life and faces the certainty of higher taxes.

 

Ron Paul is one of the few in politics who has this right.

 

My old professor...

Yes I agree it all comes down to profits for the rich and keeping the common man under control. Do you agree that upswing in trading over investment is all part of their plan? If they can make the world think like them, always chasing a higher profit, they take control as they have the most capital and hence can swing things in their direction at will.

 

I feel that over the last 20 years investment is not so much about what it should be about and much more about certain people winning at the expense of the losers. If we carry on down this route eventually we will all be traders and poorer for it.

 

Do you see that the rise of gold and silver as currencies again is a way for the common man to combat this? There has always been battles between the "money changers" and the common man and we always appear to end up back where we started, why I feel it is time for the traders to get ahead of the game and realise that we all live in this world together and benefit from each other.

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I have been thinking for the last couple of years that the cause of this financial crisis is the greed of traders and their continual want for increased profits at whatever cost.

 

My feeling is that financial advisors, mortgage salespeople, estate agents, home buyers, banks, and governments were equally greedy as they all gained in the housing boom.

 

I believe that a great many problems in the world are caused because everyone is greedy to some extent, whether we can see it or not. If you surveyed 100 middle class people I am quite sure that the majority would say they would like more money. It's just human nature Pix. If you truly wanted to simply preserve your wealth why do you not just go all in gold, (as opposed to looking for multiple times your investment via gold miners)?

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My feeling is that financial advisors, mortgage salespeople, estate agents, home buyers, banks, and governments were equally greedy as they all gained in the housing boom.

 

I believe that a great many problems in the world are caused because everyone is greedy to some extent, whether we can see it or not. If you surveyed 100 middle class people I am quite sure that the majority would say they would like more money. It's just human nature Pix. If you truly wanted to simply preserve your wealth why do you not just go all in gold, (as opposed to looking for multiple times your investment via gold miners)?

Nope it's a response to an economic system that is not working correctly. Its the same response that has happened at the end of all inflations.

 

You are citing the symptoms as though they are the disease.

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My feeling is that financial advisors, mortgage salespeople, estate agents, home buyers, banks, and governments were equally greedy as they all gained in the housing boom.

 

I believe that a great many problems in the world are caused because everyone is greedy to some extent, whether we can see it or not. If you surveyed 100 middle class people I am quite sure that the majority would say they would like more money. It's just human nature Pix. If you truly wanted to simply preserve your wealth why do you not just go all in gold, (as opposed to looking for multiple times your investment via gold miners)?

Yes as you say it is human nature to want profits and why I have other investments other than just owning gold. But at least my investments in the miners are on a longterm buy and hold basis, meaning that my capital is going towards helping production and increasing work and resources. A short term trade in a miner actually removes profit from their endeavour rather than adding anything to it.

 

Do you see what I am talking about in that there has been a increase in the amount of trading for tradings sake over the last 10 years or so. It started with the tech boom, now we have much more forex trading, spreadbetting and short term trading strategies and less talk of investment for the future by those who hold the capital.

 

I am just trying to show that the process of trading is part of problem rather than the only cause. It comes down to what sort of service each action actually provides to the whole to me. I can see that each of the people you listed above do provide some sort of service although they have also been manipulating things to their own benefit. I wonder what sort of service a trader actually provides, whenever raised in the past I am told it is liquidity that they provide. But we have loads of traders and so little liquidity that the governments have to quantitatively ease to provide it so that argument obliviously is flawed.

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Yes as you say it is human nature to want profits and why I have other investments other than just owning gold. But at least my investments in the miners are on a longterm buy and hold basis, meaning that my capital is going towards helping production and increasing work and resources. A short term trade in a miner actually removes profit from their endeavour rather than adding anything to it.

The short term trades gave you liquidity.

 

Strip them out, and the Bid/offer spread goes up, and maybe the mines (that produced the gold) would never have been financed.

 

I don't think you should REMOVE short term trading from the system, just tax it at a higher rate than long term investing. A 6 months or 12 months hold might be a good cutoff point.

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Do you see what I am talking about in that there has been a increase in the amount of trading for tradings sake over the last 10 years or so. It started with the tech boom, now we have much more forex trading, spreadbetting and short term trading strategies and less talk of investment for the future by those who hold the capital.

 

 

Perhaps this is part of a wider trend towards short-termism. People would rather have something today, and put it on a credit card, than save for it. Certainly it makes more sense for people to start productive businesses, rather than trade. If that's not happening it's because politicians aren't doing their jobs properly by creative proper incentives/tax breaks etc, but then they are bought and paid for by the banks.

;)

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Nope it's a response to an economic system that is not working correctly. Its the same response that has happened at the end of all inflations.

 

You are citing the symptoms as though they are the disease.

yep

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...I wonder what sort of service a trader actually provides, whenever raised in the past I am told it is liquidity that they provide. But we have loads of traders and so little liquidity that the governments have to quantitatively ease to provide it so that argument obliviously is flawed.

Where do you see "little liquidity" ?

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Where do you see "little liquidity" ?

In the crisis that has developed, the whole reason for the banking bailout and further quantitative assign has been to add liquidity to the system to stave off deflation. So the increase in trading has actually led to a liquidity problem and not more in the long run. The more has been created by excess printing by the scared CB's.

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Perhaps this is part of a wider trend towards short-termism. People would rather have something today, and put it on a credit card, than save for it. Certainly it makes more sense for people to start productive businesses, rather than trade. If that's not happening it's because politicians aren't doing their jobs properly by creative proper incentives/tax breaks etc, but then they are bought and paid for by the banks.

;)

The things is that the capital holders could have things right now if they wished. They are making the general public have this need to better control them IMO and realise that not everyone can have everything whenever they want it. The more they can make people take on debt to buy the things that they need for life the more they can control them and the more of there handwork they can extract out of them.

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The short term trades gave you liquidity.

 

Strip them out, and the Bid/offer spread goes up, and maybe the mines (that produced the gold) would never have been financed.

 

I don't think you should REMOVE short term trading from the system, just tax it at a higher rate than long term investing. A 6 months or 12 months hold might be a good cutoff point.

What would be the problem of the bid/offer spread being increased, it would encourage more longterm holding and less short term trading wouldn't it? I think the old system of taper relief on capital gains make much more sense than the current capital gains tax rules in the UK. I am not saying that short term holding should be banned I am just saying that the investment world has tilted in the favour of short term traders and the longterm investors are being punished by the HFT's.

 

Imagine if taxes rates where raised higher and higher for the less time you held a stock, it would kill HFT instantly. Make sense to me increase tax rates as the investment is held fro shorter amounts of time, currently you pay the same tax rate if you hold something for 1 second as 1 year.

 

 

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I have been thinking for the last couple of years that the cause of this financial crisis is the greed of traders and their continual want for increased profits at whatever cost.

 

 

You are making a moral claim here - that trading is not a good action for a person to engage in. However, I haven't seen much consideration of the elements of morality (e.g. the object, end, and circumstances) on the thread. And before one can consider the elements of morality, there are certain philosophical principles that are necessary to accept. I have been away from this board for a long time, but as I recall there were many here who did not care to accept the principles that make morality possible. Has there been a change here or am I wasting my time?

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In the crisis that has developed, the whole reason for the banking bailout and further quantitative assign has been to add liquidity to the system to stave off deflation. So the increase in trading has actually led to a liquidity problem and not more in the long run. The more has been created by excess printing by the scared CB's.

You are talking about different types of liquidity, I think.

 

Many instruments and assets were mispriced, thanks to ultra-low rates and excessive liquidity during Greenspan's time.

 

When prices began to fall more realistic levels, and this created a solvency problems for banks. So the Fed endeavoured to fix that by flooding the market with liquidity - to push air back into the deflating bubble.

 

In some sense, they have succeeded, since most big banks have survived. But the cost has be paid by savers - who get very little return on their savings. With the banks getting the benefit of low rates, and able to earn good spreads by lending out the cheap money, or just buying long term Treasury notes and bonds with all the cheap money.

 

Savera and Taxpayers are being robbed, to prop up reckless banks and also homeowners who overpaid for their homes. And people have somehow been persuaded to think of this as "normal".

 

I don't think you should be blaming "Traders" for the resulting mess. Blame the Fed and Greenspan.

 

(Here Bill Fleckstein speaks of the character of former Fed Chairman Greenspan ):

 

Bill Fleckenstein - Wednesday, April 27, 2011:

MP3 : http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/4/28_Bill_Fleckenstein_files/Bill%20Fleckenstein%204%3A28%3A2011.mp3

 

I find it alarming that Greenspan is allowed to walk around without rotten tomatoes being regularly smashed into his face. Some Bloomberg folk even show him a modicum of respect, which simply shows how uninformed they are.

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You are making a moral claim here - that trading is not a good action for a person to engage in. However, I haven't seen much consideration of the elements of morality (e.g. the object, end, and circumstances) on the thread. And before one can consider the elements of morality, there are certain philosophical principles that are necessary to accept. I have been away from this board for a long time, but as I recall there were many here who did not care to accept the principles that make morality possible. Has there been a change here or am I wasting my time?

Hi AceofKY,

 

I don't think we have chatted much before but have read some of your mining posts.

 

I am not trying to project a certain moral outlook, I am just try to explore an idea that has been kicking around in my head for a while. Over the last decade the rise in short term-trading has been astronomical. Just look at the rise of derivatives since 2000 and high frequency trading.

 

The rise of derivatives has brought the world to a situation where there are investment bankers that are to big to fail and don't have too exist in the same world as far as accounting goes. This has lead to them being allowed to pay themselves massive bonuses at the expense of the tax man. Wouldn't we all love to be able to place massive bets while being to big to lose.

 

It is said that high frequency trading makes up 70% of the market now, so investors are now trading against computers which are placed as close to the exchange as possible to shave cents of each trade. This does nothing to add anything to the market other than making bankers richer and real investors poorer.

 

It was said about both of these that they increased safety and liquidity in the market and made the markets a safer place. But that isn't correct just look at what has actually happened since their rise.

 

Taking the 'if you can't beat them join them' attitude is exactly the approach the PTB want you to take, that way they have more suckers to rip from and have even more control of the proletariat. I have had enough of putting money into the pockets of the already ridiculously rich bankers. If the governments of the world can be made to realise that increasing taxes for short-term trading and reducing taxes for long-term investing is a good thing, this will change the landscape in the favour of the people as a whole.

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You are talking about different types of liquidity, I think.

 

Many instruments and assets were mispriced, thanks to ultra-low rates and excessive liquidity during Greenspan's time.

 

When prices began to fall more realistic levels, and this created a solvency problems for banks. So the Fed endeavoured to fix that by flooding the market with liquidity - to push air back into the deflating bubble.

 

In some sense, they have succeeded, since most big banks have survived. But the cost has be paid by savers - who get very little return on their savings. With the banks getting the benefit of low rates, and able to earn good spreads by lending out the cheap money, or just buying long term Treasury notes and bonds with all the cheap money.

 

Savera and Taxpayers are being robbed, to prop up reckless banks and also homeowners who overpaid for their homes. And people have somehow been persuaded to think of this as "normal".

 

I don't think you should be blaming "Traders" for the resulting mess. Blame the Fed and Greenspan.

 

(Here Bill Fleckstein speaks of the character of former Fed Chairman Greenspan ):

 

Bill Fleckenstein - Wednesday, April 27, 2011:

MP3 : http://kingworldnews...3A28%3A2011.mp3

 

I find it alarming that Greenspan is allowed to walk around without rotten tomatoes being regularly smashed into his face. Some Bloomberg folk even show him a modicum of respect, which simply shows how uninformed they are.

All the time the bankers have paid themselves massive bonuses while shifting the mistakes form their trading to the people. The rise in derivatives and high frequency trading has done nothing to improve the system, it has swung things in their favour but has not improved things for the investors.

 

If you think that short term trading is now the way rather than long term investing, why don't you change the name of this site to Global Edge Traders (GET), got a good ring to it don't you think.

 

The blame for how we got to here we are lays at the feet of many, but in effect it comes down to the few who are the PTB. The money men control everything they put the men in power in the governments and CB's that they want there, so you can't point the finger at one chairman and say it was his fault.

 

You have agreed earlier in this thread that you thought that short term trading should be taxed differently to long term investing, they are not currently and used to be in the past. The sooner we can get back to the way things used to be the sooner things will start to improve for the world as a whole I think. This is how I would like this thread to develop, exploring the change of the tax laws in respect of trading and investing, they are obviously not the same thing so why are they taxed the same?

 

 

The thing is the MSM is owned by men who are in the powerful elite, so they are made to tow the line, you can not expect anything useful in solving the situation we are in to come from them as there controllers are the ones that got us where we are. This is also why there are grass roots discussions going on in boards like this.

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Your strap-line for this site is "Chat, trade and invest your way to a greener brighter future". Do you now see that trading doesn't necessarily lead to a greener brighter future, even for the banking elite.

 

I fail to see that trading improves anything, except for personal circumstances for an elite few which in turn brings suffering to the many.

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Or you could please both camps and call the site " Global Investment Traders" or GIT for short. This has a better ring to it....

 

Great thread pix. I have long thought that he economic system of this world is not compatible with the natural world, peace and prosperity for all.

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Or you could please both camps and call the site " Global Investment Traders" or GIT for short. This has a better ring to it....

 

Great thread pix. I have long thought that he economic system of this world is not compatible with the natural world, peace and prosperity for all.

laugh.gif

 

Glad you like the thread.

 

 

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